While maritime transport is one of the safest routes of freight movement, unavoidable risks can incur heavy damage or total loss of cargo. In March 2021, it took almost a week to free a giant container ship that moved aground and clogged the Suez Canal, highlighting the major problems of maritime channels. While it will take years to decipher who will pay for the mess, the dramatic wedging became the center of attention to the obstruction management of the framework. According to the New York Times, the crisis cost the Egyptian government $90 million in lost toll revenues. So how to protect your cargo during overseas trade? This is where goods in transit insurance come into the picture.
Goods in transit insurance compensate the insured party for the damaged freight and risks typical of maritime navigation. It will protect you from transit- risks, whether you own a yacht or ship with commercial intent or personal endeavors. By law, all shipping lines are responsible for offering maritime insurance, but we advise you to purchase additional policies for assured coverage.
How does Marine Transit Insurance work?
Like the other transport insurance, transit insurance shifts all liability from stakeholders to the insurance provider when you purchase the policy.
The goods in transit insurance policy helps you protect the cargo against any loss or damage. In most cases, export contracts come with an obligation that the exporter must own marine insurance. Therefore, we recommend you take marine insurance to fulfill the agreement’s terms, such as Carriage and Insurance Paid or Freight coverage policies for additional protection.
The coverage protects the customer’s interests and property within the contractual agreement.
Types of Transit Insurance
There are several types of transit insurance cover to fulfill various freight protective needs. Here’s what they are:
- Freight Insurance
This policy protects a:
- Shipping corporation
- Exporter
- Freight owner
Suppose they are vulnerable to losing the freight. Say, if you lose your freight during the unloading process, freight insurance will cover the losses.
- Transit Insurance -P&I
Protection and Indemnity Insurance is a joint coverage focused on the damages to third-party cargo that an average transit insurance policy may not cover. This transit insurance policy insures property in transit against perils or loss during the navigation.
- Hull Insurance
Hull insurance provides coverage to your vessel’s hull and torse, with other ship’s furniture. You can take out hull insurance as an owner to avoid damages or loss to the ship, vessel in case of an accident.
- Freight Demurrage Insurance
The freight defense insurance covers legal cost claims and handling assistance for disputes uncovered within Hull insurance.
- Liability Insurance
A liability marine insurance policy is a type of marine transit insurance offering compensation for crashes, collisions, or other induced attacks. Let’s understand with an example. Say you’re a warehouse superintendent unloading a customer’s freight. And suddenly, you drop off an expensive belonging, and BAMMMM!!!!! It smashes into thousands. The liability insurance policies will cover your loss and other people’s damage.
- Transport Insurance
This insurance coverage fortifies and compensates for operational damage to the ship. However, it requires approval from the surveyor for the protection of essential onboard machinery.
In Conclusion
The transit industry undertakes more than 40% of all cargo shipped around the world. Goods in transit will compensate for the full invoice value of the freight as well as broader losses from delays in the global supply chain. As general recommendations, we advise
- To have full knowledge of the details of the insurance.
- To examine the management procedure and ensure the cargo has its real value.
